Heather and Michael Park on 4 Steps to Unlocking Growth
Today, I’m talking with Heather and Michael Park from RentBridge. They are former operators that grew a successful RentersWarehouse franchise in the Dallas/Ft. Worth area to over 800 units. After exiting the business, they made the transition to help property managers build a better business through full stack consulting focused on growing revenue and profits.
I wanted to have them on because as consultants that have actually grown a property management business, they can not only talk about operations but actually tie that to revenue.
It so easy for conversations with outsourced sales and marketing vendors to get completely disconnected from revenue, but these guys see the big picture and we’re going to ask them to share what is actually working.
- (02:24) – Background leading up to today
- (02:31) – Michael explains how he got started in the property management industry.
- (03:13) – Heather shares her background.
- (04:19) – Goals and aspirations that guided their priorities when first starting as operators.
- (06:28) – Sharing why they eventually left the business.
- (07:47) – The differences between working with an institutional client and smaller or mid-sized clients.
- (08:09) – Focus on fund performance.
- (10:58) – Property Management Consulting
- (11:57) – The types of clients Heather and Michael currently work with and their common priorities.
- (12:13) – The approach they take to clients seeking growth.
- (17:50) – Discussing acceptable customer acquisition costs and how that is calculated.
- (18:55) – Starting with the sales funnel to make a proper assessment.
- (20:22) – Talking about numbers and their absolute significance to real growth.
- (27:08) – Applying an overhead percentage.
- (29:18) – Churn and it’s variables.
- (30:38) – Factoring in the operator’s ability to influence the revenue per door for a portfolio that they take on.
- (33:03) – Discussing the dashboard Rent Bridge made for clients to track important metrics.
- (34:18) – How metrics should inform the types of conversations you’re having with sellers.
- (34:18) – Michael and Heather walk us through their 4-stage consulting process.
- (42:57) – The most common issues that their process uncovers in the operations of the companies they work with.
- (45:25) – Discussing technology as it relates to property management and potential issues.
- (42:57) – The most common issues that their process uncovers in the operations of the companies they work with.
- (11:57) – The types of clients Heather and Michael currently work with and their common priorities.
- (58:15) – Rent Bridge Academy
- (58:49) – Michael discusses the impetus for creating the academy and walks us through its features and components.
- (49:18) – Who do you learn from?
- (52:59) – What books have had the most significant impact on your career?
- Rent Bridge LLC
- Rent Bridge Academy
- NARPM (49:59) – Premiere professional association designed for real estate professionals.
- Lead Simple (50:20) – Property management lead tracking software recommended by Michael and Heather.
- Filter Easy (51:21)
- Rent Leads (51:21)
- EOS System (53:24) – Helps owners and leadership teams create healthier, stronger businesses and achieve powerful results.
- The Traction Library – Set of five books as required reading for the EOS System.
- If: Trading Your If Only Regrets for God’s What If Possibilities; Mark Batterson (53:51) – Learning resource recommended by Heather and Michael.
- The Millionaire Messenger: Make a Difference and a Fortune Sharing Your Advice; Brendon Burchard (54:41) – Impactful learning resource recommended by Michael.
- The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl; Timothy Egan (55:00) – Learning resource recommended by Michael.
Where to learn more:
If you want to learn more about Rent Bridge, their consulting services and what Michael and Heather are up to, you can find them on their flagship website. For more details on their courses, head on over to the Rent Bridge Academy.
Jordan: 0:00:00.0 Welcome closers. Today we have another episode of The Profitable Property Management Podcast coming at you. This is Season Two on sales and I’m your host, Jordan Muela.
Every week, I interview world class property management entrepreneurs and industry experts who share actionable insights to help you grow your property management empire.
Whether you manage 100 units or 1000 this is the broadcast is designed to help you see the big picture and give you the tools and tactics that you need to get to the next level.
0:00:28.3 Alright, I told you this is going to be edited. I’m going to have this edited right now because I needed to ask you a question.
0:00:34.7 How many doors did you grow your Renters Warehouse franchise before you sold it?
Michael: 0:00:42.2 We grew – let’s see, our local one – so we were pushing in our first 18 months we were in the low 200s. We merged with Ray, with put us over 400. So I don’t know. I guess we’d use for the Dallas area, we got to 400 and then by the we left for Streetlane we were about 800.
Heather: 0:01:03.1 887 was our last full count.
Jordan: This is in Dallas or Ft. Worth or both?
Michael: Both. Yeah.
Heather: 0:01:10.4 Yeah, we reference just the DFW Metro.
Michael: 0:01:12.4 Yeah, we had jumped to over 200 and it was under 18 months. And then we – that’s whenever we did the merger. So, I’m not really sure which number’s the best to use.
Jordan: 0:01:24.0 Well, we’ll call it to over 800 units because that’s what it sounds like it was. It was over 800 units at the end before you exited, is that correct?
Michael: 0:01:32.0 Oh yeah, yeah. And then when I went over to Streetlane we were working at over 4200 units there.
Jordan: Got it. Ok. Alright 0:01:38.4
0:01:38.9 Today I’m talking with Heather and Michael Park with Rent Bridge. They are former operators that grew a successful Renters Warehouse franchise in the Dallas/Ft. Worth area to over 800 units and since they have exited the business and made the transition to help the property management industry via full stack consulting focused on growing revenue and profits.
0:01:55.7 I wanted to have them on because as consultants that have actually grown a property management business, emphasis on grown, they can not only talk about operations but actually tie that to revenue.
0:02:09.3 It’s so easy for conversations with outsource sales and marketing vendors to get completely disconnected from revenue. But these guys see the big picture and we’re going to ask them to share what they see working.
0:02:20.4 Welcome to the show Heather and Michael.
Michael: 0:02:23.2 Thank you, we appreciate it.
Jordan: 0:02:24.8 Alright. So guys, give me a little bit of background. How did you get into property management, what was your story and why did you get out?
Michael: 0:02:31.4 So, pretty interesting story. I had actually – I came into the real estate industry, oh about 18 years ago as a real estate attorney, running multi-state title companies and law firms.
0:02:42.9 After the 2008 crash, re-invented myself for a bit. Sold that company in 2014 and wanted to be back in real estate.
0:02:52.4 And stumbled across this little company that was growing called Renters Warehouse. 0:02:57.6 And really liked their concept and ended up buying their franchise here in Dallas.
0:03:01.4 Heather came along and joined – gosh, that was about after – we were up for about a year. And jumped in and kind of straightened my operations out a little bit too.
Heather: 0:03:13.2 I transitioned from a role as a petroleum geologist in the oil and gas industry into real estate, and really became the fire-fighter, as it were, for some quite some in the Renters Warehouse office.
0:03:25.0 Just trying to get things organized and up to par and create systems and implement those accordingly.
0:03:32.0 So it was a big transition, but it worked out well for both of us and it’s been quite a ride since then.
Michael: 0:03:36.6 Although, in her first week there, she actually used her geology knowledge to prove that it was not the tenant – or that is was the tenant?
Heather: 0:03:46.5 That it’s not…
Michael: 0:03:47.8 That it’s not the tenant’s fault that a sewer line had backed up because of the shifting under the ground in that area. 0:03:54.8 I’d never seen it done before.
Jordan: 0:03:56.0 Got it. So we got a geologist and a lawyer in business together. Sounds like a match made in heaven.
So you get into the business, you’re growing operations. If there’s anything I think about with the name Renters Warehouse, it really is a relentless focus on growth.
0:04:13.9 From day one when I met Brenton, the original founder, he had a really aggressive vision for achieving scale.
0:04:19.7 So when you guys were starting off in the business, did you have any goals or aspirations from day one? 0:04:27.5 Like, what was kind of guiding your priorities as operators?
Michael: 0:04:32.7 Oh yeah. I mean, it was, you know, very much in the line of, you know, grow big, get scale. You know, build a self-sustaining company that you can really enjoy running and have free time plus disposable income.
0:04:47.5 I mean, the goal was to have 100s of properties under management in a fairly short amount of time.
0:04:54.9 As you know, in property management, you know, that creates a lot of operational issues. It’s a very, very – it’s a very unique business.
0:05:01.9 So, it’s, you know, it is a very fast paced business that has a lot of moving parts and you find out really quickly – you know, my background of running multi-state title companies, you’re dealing with a lot of moving parts. It’s nothing compared to how many moving parts are happening inside a property management.
And you find that out really, really, quickly that if you’re growing to scale, you’ve got to figure out how to wrangle all those processes in a way that you’re not, you know – then you start losing customers because your processes are running you.
0:05:37.9 And so, we found – we figured out along the way quite a few different things that worked, quite a few things that don’t work, and we’ve really narrowed a lot of that down to what we find to be the most valuable things and tools in operating a property management company.
0:05:54.0 What we typically will see – a lot of commonalities with our clients, but the biggest one that we’ll see is, they’re trying to figure out how to get their arms around their business. 0:06:04.4 Growth, a lot of times, is not their issue, it’s managing the growth once they have the business.
Jordan: 0:06:09.6 Yeah, interesting. That always is a great question of where do you start. Most folks, when they think about growth, tend to think above the one bottleneck as being, “I just need more leads!” And obviously there’s a lot more complexity than that.
0:06:21.4 But just to take the story full-circle, why did you guys get out of the business?
Michael: 0:06:28.0 It was actually – for me, it was – had an opportunity to work in a national – enrol myself with an institutional owner and it was a really rare opportunity that I just couldn’t turn down.
So, I ended up deciding to take that opportunity. 0:06:44.9 At the same time, Heather, was starting do – actually started the consulting side of the practice at that time.
Heather: 0:06:51.2 I had a client approach me and ask if I would be willing to coach slash consult. And along the way, really found that I enjoyed it.
In a past life, even before being involved in oil and gas, I was a high school science teacher. 0:07:07.3 So, teaching as a whole was ingrained in who I am and what I enjoyed and so as I entered into more of the consulting piece of it, I did find that that’s what I’m good at and that’s what I enjoyed.
Interacting with people and seeing them succeed based on what we worked through together and we decided together. 0:07:25.0 And what we ideally implement together.
Jordan: 0:07:26.6 Got it. Michael, you mentioned with an institutional client. I was recently at the single-family – five star, single-family rental summit out in Nashville, which was really enjoyable. It was interesting getting a little bit of the flavour of the institutional mindset. 0:07:43.8 Particularly for those folks that are focused on single-family.
0:07:47.5 What did you take away from that time and what were the differing priorities within that organization as contrasted versus the smaller or mid-size investors you had worked with previously on the retail side?
Michael: 0:08:00.8 You know, it – that is a very interesting question because I didn’t go in really thinking that there would be as many differences as I saw.
0:08:09.5 What you notice really quickly is that the priorities of – they’re typically managing a few different funds. Or whatever their structure is.
0:08:18.2 They own buckets of properties and a lot of times, you even have multiple investors in funds who have put money into this – into these buckets that they manage. 0:08:26.1 And it’s tens of thousands of homes in some cases. It’s several thousands in others.
0:08:30.2 And the – their focus is fund performance and the things that they focus on sometimes are, you know, things like driving down occupancy, which has a bigger impact on fund performance. Turn cost. You know, they’re looking at a lot of it from the vantage point of the owner.
0:08:50.2 What I did find that was somewhat of a – caused some issues I think with some of them, is that that focus on fund performance took the eye off the ball – or they would take their eye of the ball in some circumstances where they’re focusing on the fund performance, but they’re not focusing on the operations of the property manager.
0:09:11.8 The property management company will drive fund performance. 0:09:16.8 If you’re not focusing on your operations and your efficiency and your systems and your people inside of the property management company, that’s the key to driving your performance.
0:09:25.9 If you’re not focusing on that or if you’re having missteps in those areas, you’re going to see it all the way down at the bottom line of the funds.
0:09:32.7 But there’s things that you would – go hand in hand. There’s almost an obsession over occupancy.
Well, a lot of times you end up giving away so much to a tenant just because that’s a metric that a lot of their staff is held to. Was the occupancy rate.
0:09:47.2 That’s a very important – it’s a very important number to hold to, but what happens is, they, you know – the – I see where the tenant that probably shouldn’t be kept is kept or abuses the system.
Jordan: 0:09:59.8 Concessions.
Michael: 0:10:01.3 Yeah. Concessions that just don’t need to be made and that tends to – you see that – that tends to hurt fund performance but if you ran the property management division as it were a stand alone business with that level of efficiency, then that would drive greater performance to the funds themselves.
0:10:21.6 You know, so the priorities – it’s not that they’re bad priorities, it’s that the solution to drive those numbers in the right direction is to focus on efficiency within the property management division.
Jordan: 0:10:32.7 Yeah, makes sense. I mean, there’s a really interesting intersection in just kind of analyzing that type of thinking and seeing where it’s going to go.
0:10:40.8 It’s similar to looking at some of the thinking that is dominant in multi-family but has slowly trickled into single-family. It’s always interesting just to kind of take another perspective and see what can or cannot be applied at a more of a mom and pop level.
0:10:58.3 So let’s kind of pivot to talking specifically about consulting.
0:11:01.2 So, I mentioned in the intro, a huge hangup for me is to deal with clients that are doing lead gen, that are trying to grow and that are assuming that lead gen is the way to grow.
0:11:12.2 They’re spending dollars from marketing and performance, and in exchange for those dollars, they’re maybe getting some leads, they’re maybe not. They don’t really know.
0:11:18.5 But what they’re definitely getting is some kind of report with charts and numbers that doesn’t mean a whole lot to them.
0:11:26.4 There seems to be a disconnect with many vendors when it comes to actually driving accountability in their results.
0:11:34.0 The fact that you guys have actually been full stack, you’ve held other vendors accountable, and you understand what it looks like to convert that client into revenue. 0:11:45.0 Because that’s part of the disconnect, right?
If you work with your generic marketing agency that has no experience in property management, how could you expect them to really understand the full lifestyle – lifecycle of the business, the client, etc.
0:11:57.1 So in the types of engagements that people bring you on for, is it more focused on efficiency, door growth, revenue growth, profit growth?
What are the flavour of situations that you would typically get brought into and what are the outcomes that you’re trying to drive?
Heather: 0:12:13.9 So what we find actually very interesting is that, generally speaking, that conversation shifts quite quickly.
It begins as a conversation of, “I want to grow, I want to grow, I want to grow.” 0:12:27.2 Well, if you want to grow and you want to spend money doing X,Y or Z to generate leads, but you can’t tell me what your current efforts are bringing you in terms of cost-per-lead, cost-per-sale or anything of the sort, and you don’t know what your current closing ratio is, then I as a marketing consultant or a property management consultant can’t necessarily tell you which direction to go, because you don’t know what’s working and what’s not.
0:12:49.7 So, our first approach is to dive in and really have the conversation about what is it that you want given your current circumstances.
0:12:57.7 And once they have a better grasp on their current circumstances and what’s working and what’s not, then we can collaboratively make a decision about which direction to take.
0:13:07.1 More often than not, if not almost every time, the direction shifts a little bit in the direction of – or towards the path of efficiency and increasing revenue per door. Increasing the overall ability of the staff to handle the current workload.
0:13:24.1 And then, looking more toward, “Ok if we take these steps to generate more leads and achieve a closing ratio of X and achieve a cost per lead or a cost per sale of Y, then what’s ultimately going to happen on the interior of the entity and we’re going to handle that.
And what’s our staff going to do and do we need to staff up and what’s that going to look like to the bottom line on a day-to-day basis.” 0:13:44.6 So that’s generally how we see things roll.
Michael: 0:13:48.7 Yeah, and I definitely agree with that. What generally happens – this is why we walk through our process the way we do.
Because it’s during that, you know – and our first step is, you know, this analysis stage where we dig into the company to find out – because normally, it’s just like anything else, where the – everyone wants to grow.
0:14:08.7 Everyone wants to have thousands of doors under management, run really efficiently and make a lot of money, and so when they hire us, they want to go to the next step.
0:14:15.9 They want to start putting some money into the business and they, you know, — that’s usually where the conversation starts.
0:14:23.2 But as we go through that research stage, more often than not, there’s one – there’s leaking money, usually. Somewhere.
Heather: 0:14:32.3 Everywhere.
Michael: 0:14:34.6 We just had, again – we just had one where we found on the first, probably 20 or 30 minutes of digging through a folio and digging through their Quick Books and matching up their processes, we found about $45,000 dollars that was missed last year. 0:14:50.7 And it was an operating error. And that was one of the first things that we saw.
Heather: 0:14:57.3 And for the record, those are operating errors that we personally made ourselves. 0:15:03.2 <Inaudible>
Jordan: Yeah, right.
Michael: 0:15:03.4 That’s how we learn, you know. And so, but it is, it’s that step.
0:15:08.5 So you go through, and by the time we get through the end of doing the analysis, because we take a look at the financials, we take a look at the technology, marketing, and everything else, you know, everything else in between.
0:15:23.8 And at the end, what we’re able to do is sit with the owner and prioritize what do we need to tackle first, or simultaneously.
0:15:32.8 And it is usually something where we pick the top handful of priorities. Start on those priorities, work with their staff to implement what we need to implement, and move through the process in that order.
0:15:46.3 There are things that you can make a change in that are going to have a much bigger impact than some of the others. 0:15:52.7 And that’s what we want to do. We want to tackle those high priorities first.
0:15:56.4 And, you know – and a lot of times that involves marketing efforts as well. Same thing. 0:16:03.3 And Heather had spoke a little bit about revenue per door and expenses per door and profit per door.
You know, a lot of companies don’t really focus on those numbers, but those are probably the most important numbers to focus on. 0:16:19.0 That’s what’s going to tell you whether or not you’re running a tight ship or not.
Heather: 0:16:23.1 And one of the things that we struggle to communicate and sometimes we’ll get it accomplished quicker than others, but one of the things we struggle to communicate a lot is that the answer isn’t always to use money as duct tape.
0:16:37.2 It’s not necessarily a great decision to just throw money at the problem every time to generate more leads, or hire another staff, or stuff like that. 0:16:46.8 Sometimes the answer isn’t money. Sometimes the answer is a process or a different process, or taking a step back and reworking the way something is approached.
Jordan: Oh yeah.
Heather: 0:16:56.7 Or sometimes eliminating something that you’re doing. So, throwing money at it is easy, but doesn’t always accomplish what you’re trying to accomplish.
Jordan: 0:17:05.0 Yeah, well said. So, truisms like that actually have meaning if you’re in the numbers. If you’re in the data.
0:17:11.6 Here’s what I think about. I think about scenarios like this: I want to grow faster, so what do I do? I throw money at the problem. I swipe the credit card. That is the easiest way to get leads.
Just to demonstrate the idea that lead gen, in and of itself, is the easiest part of growth, you could sign up tomorrow with All Property Management, Management Property ((?)), AdWords.
0:17:33.6 It’s not challenging to drive leads, it’s challenging to drive them at an acceptable customer acquisition cost.
0:17:39.4 And it’s very possible to start scaling growth and to start immediately scaling your customer acquisition cost and basically eat all of the profit that that growth could have possibly generated.
0:17:50.7 So, when you think about the opportunity for growing your doors, like sensibly, how do you guys think about this?
I’m really interested to get your feedback on this. What is an acceptable customer acquisition cost? How would you calculate that? And walk me through your logic on, like landing on what the parameters for – whether a given CAC number is high or low.
Heather: 0:18:19.6 This is a great question. We’re looking at each other, like, “Who gets to answer?”
Michael: 0:18:25.0 That’s a good one. I’m going to – my caveat to anything I say here is, everybody has their own answer that they like to this. So, this is not hard and fast, but why don’t you go first and then I’ll give my answer.
Heather: 0:18:34.8 I’ll start from the perspective of that’s never going to be the same answer in any given market. Even within a market, that’s never going to be the same answer for any given business.
0:18:44.3 I can say that within a major market, we’ve seen customer acquisition costs that range, and I’m not exaggerating, from $15 dollars to $1500 dollars in a given major market.
Heather: 0:18:55.0 So, it’s all about how you’re going about this and how you’re approaching it, and from what perspective and with what resources.
We love to start with looking at the sales funnel as a whole. 0:19:07.5 If I say to a client, “Describe your sales funnel,” and I get deer in the headlights, I know we have work to do.
0:19:14.9 If I can get a little bit of a starting point with respect to, “What does your sales funnel look like?” then at least they know what marketing efforts they’re taking in terms of their messaging or their positioning, or what avenues they’re implementing. 0:19:26.5 Then we’ve got a decent head start.
0:19:28.8 So, looking at the sales funnel is priority number one for my end of things.
0:19:34.6 So we start with, again, messaging and positioning. We start with, “What’s your overall budget right now and what do you want to accomplish with that budget? And if we accomplish that, who’s going to handle that work? What’s the inside of your staffing look like and what are their capabilities?”
0:19:49.5 That’s sometimes even more important. So starting with the sales funnel, looking at each avenue along the way.
Building the buckets, building the catchall for when a lead hits a certain stage, what happens next. 0:20:03.1 And automating that as much as possible so that we don’t necessarily have to man every single task along the way.
0:20:11.0 And I’ll let you pick up from here as far as the numbers go, Michael, but if we don’t have a sales funnel to work from, then we can’t really go any further than that. 0:20:19.5 So that would be priority number one for us.
Michael: 0:20:22.6 Yeah. So here’s sort of – here’s how – I look at it a number of different ways. Because when you – kind of like you said, a lot of folks will say, “I’m going to throw some money, I’m going to buy a ton of leads.”
0:20:34.4 A few things happen when someone does that. One, if you’re spending a couple thousand dollars a month on leads, you’re getting a lot of leads and you have a fairly decent closing ratio.
Let’s say you’re closing 30-35-40% of those. Maybe you’re closing 25% and you’re still – you feel like you’re doing pretty good.
0:20:51.3 Well, let’s say, “Wow, all I have to do is spend more money. I have the exact same closing ratio, I’m going to grow two or three times as fast.”
0:20:58.1 Well, what you find is you start hitting a point. It’s the diminishing returns. You’re not typically going to have that same closing ratio at some point.
0:21:06.6 And that generally – you’re going to see a major drop when the owner themselves are not the one who are the sales person in front of the person every time. 0:21:15.5 The owner of the business is almost always going to have a much higher closing ratio.
0:21:19.2 Well once you grow to a certain point where you have other folks doing business development, other team members, they’re closing ratio, not always, but often is nowhere near the owner of the business. 0:21:30.5 Because people just like to talk to the owner of the business.
0:21:32.3 So, when you do that, when you look at budgeting and what’s an acceptable – and I am getting to your question of what’s an acceptable cost to acquire a client.
But what you get to, is you have to start thinking through, ok, I’m going to have a reduction in my closing ratio the more I spend.
Plus there’s going to be different types of – different types of sources of leads have a different cost to them per lead.
0:21:56.9 So you start with that cost per lead and as you’re looking at where your budget goes, and where your money is spent, understanding that you may have a diminishing return the more you spend.
0:22:06.8 Then what a lot of owners don’t think about is – I don’t need to look at that first year revenue as me making that money back in the first year, first six months, or whatever that number is.
You have to look at as, “What’s my net out of that?” You have to apply your overhead to that number.
0:22:23.2 So, if I’m going to make $2500 dollars in that first year on my gross revenue level, but I’m only going to pocket, after expenses, a thousand dollars, well then, I’ve got to back at my cost out of that thousand, not out of the $2500. Because…
Jordan: 0:22:38.4 Oh, oh! Here we go! Alright! Keep going baby, I’m with you.
Michael: 0:22:45.7 Yeah! So, when you – there’s so many – one of the reasons you have – a lot of companies are suffering, is because they’re not doing that.
And they’re, “Why am I not making any money? I’m burning through cash.”
0:22:54.5 And they are small guys, big guys, everyone all over the board. And it’s because they’re looking at, “Oh, well I just added $2500 in revenue to my top line and well, you know.”
You didn’t. You really didn’t. You did it to your top line, but not to your bottom line.
0:23:07.8 So, that’s why when I – when you or when we talk about our revenue per door, and our cost per door. When you look at your revenue per door, when I’m negotiating, or have negotiated with an owner, what I want to look at is, is that going to move my needle one way or the other when I look at my revenue per door and my expenses per door.
0:23:25.3 Because that’s going to tell me if I’m negotiating with someone who has a decent sized portfolio and I’m moving my needle, I’ve got to have a very compelling reason to move that needle down on my average revenue per door if I’m having to negotiate fees and things like that.
0:23:38.4 Because, again, you have to take your – you can’t just look at the top line. You have to look at your expenses per door and then your profit per door.
Heather: 0:23:45.3 Your hard costs are not going to change regardless of the number of doors that that person’s bringing in with respect to staffing. You’re not going to have the economy of scale beyond a certain extent.
Michael: 0:23:57.1 Yeah. It might dilute my phone bill, but it won’t dilute my staffing for very long.
Jordan: 0:24:00.9 Exactly. Yeah. Alright. So, long winding answer and basically got to exactly what I wanted to hear.
My basic opinion on this is that – and this is something that’s been clarified for me recently as we’ve gone through this benchmarking study.
But customer lifetime profit before sales and marketing expenses, that is the number – that is the stack of dollar bills from which you can decide how many of those you want to grab and spend to acquire a customer.
0:24:35.1 So, put some more colour on that. When we look at the results that came out of the property management benchmarking study we did – again, this is a sample set of 50 companies, we found that the bottom 25%, in terms of profitability, their customer lifetime profit before sales and marketing, on average, was around $750 dollars.
0:25:02.5 So they’re profiting $750 dollars over the entire lifetime of the relationship and the average for the entire study was around 49 months.
0:25:13.1 Making $750 bucks in profit over 49 months, that’s – A: That’s not a lot of money. You know. But that’s it own separate observation.
0:25:21.3 But the more relevant observation is, that’s not a lot of money from which to – those are tight margins in terms of being able to pull out some subset of those dollars to be able to spend on marketing.
On the high end for the top 25% of companies, the top 25% most profitable, their customer lifetime profit before sales and marketing was around $2700 dollars.
0:25:44.8 But we know that the answer to this question of how much should I spend on my customer acquisition cost – it can’t be emotional, it can’t be how it feels to pull the money out of your wallet.
0:25:53.8 And a lot of people that graduate past that, they tend to anchor it in what they think of how much they can acquire a door for. Right?
0:26:02.3 They’re just these multiples that are kind of floating around. A lot of people will tell you somewhere between $1200 and $1800 dollars is what you’ve got to spend to acquire a door if you were to buy a portfolio.
0:26:13.2 Well, that’s also not an apples to apples comparison. Because it’s not like you can snap your fingers and buy a portfolio within the next two weeks.
0:26:21.3 But I find both of those things to be radically inferior to customer lifetime profit before sales and marketing. 0:26:26.9 That’s my piece on it. What do you guys think?
Michael: 0:26:30.2 Oh yeah. I agree with all of that. And you look at – so, it’s funny. Kind of backing up to your acquisition. We do this in acquisitions too. We have been working with a client actually, the last couple of weeks. Looking at a couple hundred of…
Heather: 0:26:47.4 Close on Friday.
Michael: 0:26:48.0 Couple hundred units and the way that we built – we essentially built an algorithm.
And what the algorithm does is it takes all the different types of revenue produced by a property management company.
We segregate it out between recurring revenue and transactional revenue and we overweight the recurring revenue and we underweight the transactional revenue because recurring revenue is more valuable.
Michael: 0:27:08.5 Well, before you apply anything, we actually apply an overhead percentage. It might be 30 – excuse me, it might be a 50% overhead, it might be a 60%.
And again, it’s net new. So, you know, having net new to the portfolio, ideally, you’re going to have a lower expense.
However, in this particular portfolio, the revenue was, in general, pretty low. So 0:27:33.6 <Inaudible> because the revenue per door was very low, your expense ratio was a lot higher, because of how low your revenue per door was.
0:27:42.0 And then when we do that, we back into how many months are you willing to get your money back based on the net profit.
0:27:49.8 And we have a little bit of a waiting – or a little bit of a wait into your gross revenue, but the majority of the waiting goes to my net income. And we base that number off of the adjusted amount.
0:28:02.7 Because I am adjusting for the value that I put on recurring revenue and my value I put on transactional revenue that may or may not happen again.
Heather: 0:28:11.5 And a number of other factors.
Michael: 0:28:12.8 Yeah. And I mean, we have about 20, you know, 20 factors or so that we built into the algorithm.
Well, what we do is based on how quickly you want to make your money back. That gives us a number. And it might be, you know – you hear these numbers, like you said, $1200 a door, $1800 a door, $2000 a door. 0:28:32.4 And those numbers vary so widely.
And the reason that you can – you can have two identical property management companies, but if their fee structure is moderately different, you could have one going for $2000 and one going $1000 and both could be a good deal based on how the management agreements have been structured, their fee structure, their ancillary revenue, everything else. 0:28:56.4 And so, that’s how that price is.
So when you look at it from not an acquisition model, but you look at it from just a flat out client and customer acquisition – you know, some of that logic somewhat holds, because I don’t necessarily look at them too differently.
Other than the fact that you have – you have a higher risk of – if I go buy a portfolio, I’m diluting my risk of client loss.
0:29:18.4 If I go get a client and my operations are suffering and I spent $2000 to acquire that client, there is a high likelihood that I’m going to lose money if that client leaves in six months.
0:29:31.3 And, you know, whereas on an acquisition, at least I’m diluting some of my risk. 0:29:35.6 But, I think the – you gotta ask yourself the same the thing. How many months do I need to hold this client in order to feel comfortable that I made my money back and not only just make my money back, because we’re not in business to break even – how quickly can I get to a profit level I’m comfortable with and how much money am I willing to spend to acquire every door.
0:29:56.5 Because I can go get doors under management all day long. That’s easy. I just – if I have an unlimited budget. It’s keeping them that’s the challenge. And the faster you grow, the harder that can be at times.
Jordan: 0:30:09.1 Yeah, and we see churn as something that, once it spirals out of control you really can’t get out from under it no matter how aggressive you’re growing – if your churn is high it’ll just eat up as much money as you’ll throw into it.
0:30:20.6 It is worth pointing out that at the end of the day, my opinion – top line revenue multiples are pretty much worthless to genericize about because of what you just said.
0:30:29.9 Talking about an 0:30:31.0 [Inaudible] multiple becomes a lot more useful because it takes into account how the business is actually being run.
0:30:38.4 So the assumptions that you’re making about waiting, etc., how do you think about factoring in an operator’s ability to influence the revenue per door for a portfolio that they take on?
I mean, obviously a lot of that stuff is baked into agreements and contracts, etc., but how do you factor in the new operator’s ability to pull that number up via best practice, X, Y, Z? As opposed to being locked into previous contracts?
Michael: 0:31:06.9 I can see it go different ways. Well, I’ve seen it go both ways. It all is – everything rests on the ability, skill and operations, quite honestly, of the buyer and the performance of the seller.
0:31:22.7 If the seller was suffering and they’re selling because they were suffering, the experience – if they come to a competent buyer, is likely going to be better.
0:31:31.7 If it’s somebody who’s a pretty good operator but they’re retiring and when they sell off to someone who is not going to give as close a personal attention to, you know – one of the things about this business is the vast majority, the vast, vast, vast majority of properties are managed by a mom and pop sized company. 0:31:53.2 Under 200.
And if that portfolio gets sold to somebody who has 1000, then it might be more difficult for them to feel like they get the one on one attention.
0:32:04.3 Because the buyer only probably knew every single thing about every single property that they managed.
0:32:08.6 And so, when they sell, I think it is – that needs to be factored in. You’re going to have an increased churn rate, most likely, in your first year or two.
0:32:16.7 So, any time you calculate, then that’s actually part of the algorithm. Is we calculated and estimated churn rate.
Is what’s my churn rate going to be in my first and second year and if you do a straight line churn rate, eventually you run out of the portfolio, but hopefully that levels out to the very minimal amount.
0:32:32.9 And by the way, I think you’re very right on the churn rate. When you’re doing planning and budgeting and forecasting, you need to treat churn rate – you have to build churn rate into your calculation.
0:32:46.8 That is going to happen, and hopefully you’re operating well and it’s not out of control.
But you’re right. 0:32:50.5 Once you start getting over – if you start getting over 10% churn rate, something’s going wrong. And either something economically is happening, or something’s happening within your business that needs to be addressed.
0:33:03.5 And, you know, we built – I’m going off on a total aside here – we built a – for our clients we built a dashboard, which essentially tracks a lot of the metrics.
0:33:14.3 And one of those is a trending, a trending churn rate, and a trending – things like trending cost of acquisition, the trending revenue per door, and if it gets out of trend – so, you can set – my benchmark or when I start seeing red on my screen, then I need to address it.
0:33:31.4 If I set that number at 5% annual average churn rate and my properties lost month by month goes over that, we built it to alert our clients.
0:33:43.1 Because – and again, nothing – this is kind of where a lot of the property management software, I think, falls down.
0:33:48.1 It’s not a business operation software. 0:33:51.1 And again, I’m not in the software business, but I – you know, the dashboard’s essentially a tool we built with some formulas on the backend to tell us, “Ok, my churn rate is at 7% now, something’s red on my screen, what’s going on?”
0:34:04.5 These kind of numbers are things that are extremely important.
0:34:08.2 Same thing with your cost per acquisition and your revenue per door, expenses per door. Knowing those trend lines and seeing those trend lines is really important as well.
Heather: 0:34:18.2 And this really should go into informing the type of conversations that are clients are having with these potential sellers.
You can’t necessarily look at a management agreement and know what kind of company you’re getting into.
0:34:31.1 Looking at the ability to garner the information that you need in terms of churn rate, in terms of cost of acquisition. In terms of the total length of that property, that property’s tenure.
0:34:42.4 Those are things that are very often difficult to get your hands on, and if you don’t have any of that, you absolutely have to factor that into your risk.
Because, frankly speaking, you don’t know what you’re getting into at that point.
Jordan: 0:34:55.7 Yeah, the due diligence process is really critical to get into the numbers. Certainly walked through that process.
Kind of 0:35:03.9 [Inaudible] with a number of peers and seeing times where, even from the perspective of the seller, where if the payout is structured over a number of years, for the seller to think about doing due diligence on the buyer to make sure that there’s stability there and that long-term payout is actually going to happen.
0:35:25.3 Getting in early, knowing what you’re looking for, looking at all of the numbers is really key.
0:35:28.9 I do want to kind of talk about the consulting process that you guys go through. 0:35:33.8 So, from what I understand, from what we talked about previously, there’s about four stages.
Walk me through what a typical client engagement looks like and how you choose to prioritize what to work on.
0:35:46.5 Because, as the business owner, if we could just pause time and become a consultant for ourselves, there would be a lot of things to work on. Right?
0:35:53.8 We all experience that. But there’s still the question of what do you work on, when, in what order, etc. Walk me through how you think about all of that.
Michael: 0:36:02.5 Yeah, and so we designed the process the way it is for a very specific reason. Because, a lot of times, as a business owner, one of the challenges is stepping back from the day to day business is really a valuable – yeah, I mean, just in really evaluating the business from, you know, not being so much in the weeds of that – they’re particular day to day business.
0:36:23.2 So, having – sometimes there’s just even value in that. But if I were to give any advice to a business owner, is set aside somehow, I know this is very hard in property management, but set aside, you know, whether it’s a handful of days or a day or a week, where you, and if you have a leadership team, where your only focus is taking a bird’s eye view of your business and really trying to find out where are – where are my pain points and drilling into the operational pain points.
But, you really do want to take – and this is kind of our process in this when we basically look at everything we look at.
0:36:57.6 We want to look at, well let’s take a look at your market. Where are you doing business? What’s your competition doing? What are the, you know, head winds that we’re facing inside of the market, in your marketplace.
0:37:09.8 You know, how – what technology packages are we using? What’s the pain point in those technology packages? Do I have a rat’s nest of a bunch of different things that don’t really work well or talk to each other? Or, you know, and do I need to implement something fairly different?
0:37:25.0 We take a look at fee structure and revenue opportunities. We look – and the biggest we look at is – well, I’d say that’s a real big one, but – and then we look at operational efficiency, you know.
0:37:36.5 This is a business where you’re handing off the baton many, many times during the lifecycle of a property. 0:37:41.7 And usually it’s within the baton handoff where problems arise.
0:37:47.0 So we want to break down and walk through that property life cycle of each one of their departments.
0:37:54.0 And by doing all – by doing all of that analysis, those different areas, what happens is we’re able to then build a complete picture of the business. What’s good, what’s bad, what needs to change.
0:38:04.3 Because we generally don’t like to start implementing at that – until we’ve done this.
There are times when we’re with a client who’ll really want us to come in and look at one thing on an acute level before we hit the entire analysis.
0:38:18.0 And we’ll do that, but we don’t really like to because, you know, one of the things in property management, everything effects everything.
0:38:25.4 If I change, you know, — if I turn a dial over in my maintenance department, it might affect leasing. You know, you’ve got to really understand the entire picture of the business before you start making recommendations.
0:38:36.3 Once we make the recommendations, whether it’s fee structure, you know, operational structure, or technology, then we can prioritize based on how high a level of pain do I have, or the opportunity.
0:38:51.0 For instance, when we’re talking about financial changes, or maybe ancillary revenue sources, or different vendors that we want to use, one of the things we do when we make our financial recommendations is, quite frankly, I sort it by the potential annual impact that it will have.
0:39:08.8 And so, we can look at what is my largest annual impact and is that something we can reasonably implement right now.
0:39:15.9 And there are things that you can simultaneously implement. But I want to have big impacts early one which will create momentum through the rest of my implementation and my coaching process.
0:39:26.5 Implementation is – essentially we work with the owner to determine what they want to implement.
0:39:34.0 That might be some marketing solutions. A lot of times we do find marketing and branding and things like that just are not, you know – there’s usually a lot of improvement.
0:39:45.1 Especially around branding and things like digital branding, branding, brand development. 0:39:49.7 Our business 0:39:53.4
0:39:54.4 We have – there are some really great guys, great companies out there doing some really neat things in terms of branding and marketing, but when you look at the majority of companies out there, it’s – some of us are still stuck in the 90s.
0:40:09.0 So, we freshen that up and then as we look at those things, is those are the things we’re going to go through and we’re going to pick which ones are the most important at what time to then implement.
0:40:17.2 So those get implemented and then this – that tends to blend with our ongoing coaching.
0:40:24.0 So, we might finish up with a project in the financial part of the business but we’re moving into an implementation phase, say in marketing, but the financial part is now in the coaching phase.
0:40:34.9 We’re doing some ongoing coaching and working with them and monitoring metrics and those types of things. 0:40:40.9 So, that – in a nutshell, that’s kind of the overview of the process.
Heather: 0:40:47.6 No, I think that definitely covers all of the highlights.
One of the key things that we like to look at – and we’ve come back to this several times – just because it’s going to have a great effect or a noticeable effect on the bottom line, doesn’t necessarily mean that the property manager has the ability to implement that specific line item.
0:41:10.3 What we’ll tend to do is make sure that we’ve gone far enough down the path of analyzing the operational infrastructure and the staffing and individual unique abilities to make sure that if we make certain decisions and choose to implement certain pieces of the analysis, that there’s, frankly, the man power there to handle it. And the buy in.
0:41:33.7 A lot of the time, what we see is that it takes a little bit of encouragement from the business owner or sometimes from us just to make sure that everybody understands that this is not new, this has happened before, someone has been quite successful in this arena, and just encouraging them to grasp the concept as well as become the cheerleader that we need them to be.
0:41:59.4 Change is hard, change is really hard and it’s not always welcomed. 0:42:03.6 So, getting the buy in, making sure that everybody’s on the same page and assessing the ability to be successful in a certain area is a key component of what we do before we run down the path of the decision making and the implementation.
0:42:18.7 So, that tends to apply to all categories, be it analysis, implementation or coaching. Ongoing coaching as well.
0:42:27.3 Just making sure that every decision is well thought out and planned before we take any steps.
Jordan: 0:42:33.3 Got it. So it makes sense to me. To be honest, sounds expensive. And it sounds like it’s the sort of thing that would create a massive amount of value if you can stomach actually paying to have a third-party come in and audit what you’re doing.
0:42:48.0 And frankly, in a perfect world, that’s what every business owner would do. Is to actually spend the time to pour a fine toothed comb over all these different areas.
0:42:57.3 But, I’m going to guess, in your business, similar to our business on the Profit Coach side of things, there’s a small couple of categories that keep coming up as being the most frequent offenders.
0:43:08.5 They’re the highest impact. For us, what we tend to see typically falls into the category of being related to either churn, revenue per door, or labour efficiency.
0:43:19.1 Those are kind of the three big buckets that when we find significant problems, they tend to exist in those areas.
0:43:26.6 Similar for you guys, different buckets. I mean, when you find something to solve or something to attack, what buckets does it tend to fall into?
Michael: 0:43:34.9 Not too dissimilar but…
Heather: 0:43:37.5 Mine would definitely be the marketing bucket.
Heather: 0:43:40.9 Making sure that people can answer the questions that we need to answer before any decisions are made.
So, understanding what we referenced earlier, your cost of acquisition as a whole. 0:43:52.3 And really just hemorrhaging money in a certain area.
0:43:54.9 So being able to reign that in, make some sound, well informed decisions and make those changes quickly is probably the biggest pain point that I run into with my piece of the analysis along the way.
Michael: 0:44:09.6 Mine would probably be fall within a few different categories that I really see. One is when you really look at the financial piece of a property management business, it is kind of what you said, a lot of property managers are just not operating efficiently.
0:44:26.5 You know, not through – the industry’s changed quite a bit and so our pricing model has tightened in some markets.
0:44:35.6 But if you haven’t implemented certain procedures or technology that make you more efficient, then you’re – like you said, you’re going to end up falling behind in your revenue and profit per door.
0:44:48.7 What you – so I see, in terms of the fee structure and the opportunity for additional revenue is one of the biggest areas of impact that we have been able to see and to have whenever we work with our clients.
0:45:06.4 And usually, you mentioned, it can be expensive. The nice thing about that, is we can show, you know – if you were to apply these changes and look at it from the standard of, “Well what would happen if my entire portfolio looked like this?” 0:45:18.2 It makes our fee look like nothing. 0:45:23.0 And so, that is probably…
Michael: 0:45:25.2 Yeah, that’s a really big one. My other one would be technology. You know, the technology in property management, it’s come a long way in the last several years, it really has.
0:45:36.4 But we have such a long way to go. We’ve been a little bit behind the curve, I think, as an industry but we’ve got a few leaders.
0:45:45.2 I think you all are one of the big leaders in the industry. You’ve got a few others out there who are really changing the way that we do business.
0:45:54.0 And as a business owner who usually has your head down in the business on a day to day basis, a lot of times you don’t have time to try new, you know – a new technology or new software. You just don’t have time so you don’t do it.
0:46:09.3 But there are a lot of solutions that work better than others. And sometimes it’s even the software or the technology you’re using – you’re not maybe necessarily using it to the full extent.
0:46:22.3 There’s an argument, again, technology in our industry – do I go with my best in class in every single component or am I going to overweight to be able to – you know, for things I can integrate into my systems.
0:46:22.3 And that’s an ongoing battle. I mean, it really is. Because sometimes if the best in class has a bell and whistle that is really worth me having to log out of one system and then into the other, that it might make sense.
0:46:44.7 But in a lot of cases, is that bell or whistle you’re getting worth that extra time? And what we find is, a lot of companies – it just, sometimes I find, they chase the bell or whistle without considering the implications of, “How do I integrate that into my workflow and my process and my cohesiveness?”
0:47:05.0 And then the third thing is, companies that have reached a certain size, is communication between departments and tracking. Whether it’s random tasks or procedural tasks. That’s one of the biggest things we see is, and one of the biggest things we get asked to look at is, “How can we know what’s happening in a certain process between departments?”
0:47:24.0 So those are really my big three things that come up over and over again.
Heather: 0:47:28.0 And I would just add a little bit to the technology piece. As a whole, what we find supplies the largest amount of culture shift and like I referenced earlier, buy in, is going to be that – establishing a brand identity and freshening up the overall image and the ability to speak to who you are, what you are and how you are as a company.
0:47:53.5 And, frankly speaking, the benefits to something like Lead Simple, are pervasive in the sense that they meet with us in class, as Michael mentioned, but they meet the ability to integrate into all of these different systems.
Including your branding and your ability to automate your marketing workflows and maintain that level of professionalism that you want your brand to speak to.
0:48:16.2 With the automated follow ups and the SMS messaging and everything else that is included in an all-encompassing CRM like Lead Simple.
0:48:25.0 So that’s what we’ve seen has been, among others, a huge benefit to our clients that are really trying to revamp and really trying to identify themselves and set themselves apart from their competition, is little things like this that people don’t generally think of in connecting to your brand identity and your overall professionalism.
Jordan: 0:48:44.5 Sure, yeah. Right action, right time. That’s a lot of what I hear you guys saying. You’ve lived it, you’ve been there. Right action, right time is where so many people get tripped up. Right?
0:48:54.4 It’s like the equivalent of having a bad back and a broken leg but you’re just obsessed on perfecting your jump shot.
0:49:01.3 The jump shot matters, but being like ambulatory is probably a good precursor to actually being successful at the game overall.
0:49:08.8 So, I do want to transition now to the rapid-fire section of the interview. I just want to get some guttural answers from you guys on a host of issues.
0:49:18.3 And the first is this: Who do you guys learn from? Where does inspiration come from for you?
Michael: 0:49:25.1 You know, we actually learn probably from every single client. As much – when we go in and we break down a company, inevitably we find the common problems.
0:49:37.5 But, a lot of times we find some really innovative solutions and – I kind of tell most clients – if I see something really neat, I’m stealing it.
0:49:44.7 And our clients, along the way, come up with some really great solutions that, you know, I will admittedly say, “I’m integrating this into our consulting practice. It’s a great solution.”
Heather: 0:49:59.7 I was going to say, you know, the cliche answer is NARPM, but in reality it’s the relationships that you get out of NARPM and the groups that you end up joining after meeting this person in NARPM, or engaging in other types of – mostly, I would say primarily digital conversations and Facebook groups and things of that sort.
0:50:20.5 But to speak to, you know, what client – what Michael had mentioned from a client, it’s how we learned about Lead Simple.
0:50:24.5 We had heard about it time and time again, through, you know, many visits to NARPM or NARPM related meetings. Or other members of NARPM, but had never really been able to dive in or had the opportunity to really take a look.
0:50:38.9 And it was one of our clients that was utilizing it quite successfully that gave us the opportunity to peal back the curtain and take a deeper look and see how we can implement this in several other areas.
Jordan: 0:50:54.0 Love it. What about any other thought leaders though? Any industry folks, or maybe outside the industry or inside the industry. Any thought leaders that you follow closely?
Michael: 0:51:03.8 You know, I like the guys who are innovative. Who look at – and this is kind of where – when we look at our industry and see, you know, vendors in particular. You know, we’ve obviously mentioned – I don’t care – I don’t know if you care if I mention a few names but…
Jordan: Please do.
Michael: 0:51:21.5 I think companies like Filter Easy are just changing the landscape and creating enormous value. Rent Leads, in my mind, is a huge, huge game changer.
They’ve done us some very innovative things. 0:51:35.0 Everything from, you know, reducing the cost of showing properties to now they’re integrating this – the key list system.
0:51:43.9 And that allows access and never having to go change a lock box again. And there’s just extreme, you know, just an extreme amount of value in some of these thought leaders who are bringing new solutions to the table and, you know, they’re young companies.
All of the, not all of them, but most of them are fairly young companies. They look at the way we’ve done business for decades and they start asking them questions. “How can we do this better and how can we tweak it and mold it.”
0:52:12.4 And, you know, we like, you know, we like that because that’s kind of the questions that we like to ask. “How can we do it better.”
Because, we go in and see a client, you know, we have – we bring a lot of our background. 0:52:23.4 We bring the experience of being in front of different – other clients and their solutions and bringing ours to the table.
And we’ve – that’s great and all, but we’re not – we don’t always know everything and the industry is changing so fast, these – it’s the thought leaders that are changing the business. 0:52:37.7 So, I think there’s a lot out there. Yeah. I think there’s some really smart things happening out there.
Heather: 0:52:43.7 The common thing that I think we see is looking for the opportunity to do more with less.
And everyone that Michael has just mentioned is absolutely catering to that mentality and providing that ability. 0:52:55.6 So I think our clients definitely relate to that and can benefit from it.
Jordan: 0:52:59.3 Alright. So let’s stick with the education theme. Books. Are there – is there one book for either of you that you would say has had a lot of – has had significant impact in your career? And, Heather, as a teacher, surely – please don’t come up short on this one. Surely you’ve got something for me.
Heather: 0:53:18.2 Well, this is kind of a terrible answer, but you know, something that Renters Warehouse introduced to was the EOS System. 0:53:24.7
I find that to be – pieces of that were just absolutely – I don’t know, we couldn’t have done what we did or what we’re currently doing without it. I may or may not have gone back and read that multiple times since then.
0:53:42.4 But another book that’s, you know, kind of outside of the industry and I would definitely recommend it and I’m probably going to completely fail to remember who the author is, but the book is, If. 0:53:51.3
And it’s all about just taking that chance and just speaking to your strengths and knowing that it really doesn’t matter if you’re determined and if you’re looking forward to what you plan to accomplish that it can happen. It doesn’t matter what you’re equipped with or what you’re lacking if you just happen. It’s your big if.
Jordan: 0:54:12.9 Alright, we’ll have to check. I haven’t heard of the latter one. We’ll definitely have to go check that out. I’ll link to it in the show notes.
Michael: 0:54:18.9 Yeah, it is a great book. And you took my two answers that I had.
Jordan: 0:54:24.3 Good call.
Heather: 0:54:24.7 That’s because you read two books last year.
Michael: 0:54:25.6 I mean, you can tell that we’re married because one of us will end up reading the book. We’re like, “You really need to read this” and then read it. And, you know, I’m sitting here thinking, “Oh great, now I’m left with comic books I can reference.”
Jordan: 0:54:37.0 [Inaudible] to property management.
Heather: 0:54:41.8 You always talk about the Millionaire Messenger and how much you enjoyed that one.
Michael: 0:54:42.7 Yeah, I think the Millionaire Messenger is a really good one and, that’s again, sharing your story and building – no matter what business you’re in, is sharing your story and then building your business around that.
0:54:53.0 You know, and an interesting book that I read, has nothing to do with the business, nothing to do with anything, and it’s, The Worst Hard Time. 0:55:00.3
And I’ve always referenced this as one of my business books. And the reason is, it’s about the Dust Bowl up in the Panhandle in Oklahoma and Kansas.
And what you – and I read it around the time of, you know, the great recession in 2008-2009 time period. 0:55:17.7 Somewhere around that time I was reading it, and it – a lot of people don’t realize this, but the Dust Bowl was called by a financial bubble.
And it had to do with, I think it was a blockade of wheat from Russia. Was that right? So essentially, it drove wheat prices up. 0:55:40.6 Everyone in the Pan Handle, you know the Pan Handle was northern parts of Texas, Oklahoma, and Kansas and those areas started just planting wheat, planting wheat, planting wheat and they’re just making a killing.
0:55:50.2 Well, embargo ends, wheat prices fall and the only thing that the farmers can do is plant more wheat because they’re making less on it.
Well, tears up the ground, you end up with a dust bowl. 0:56:00.2 It’s a long drawn out thing, and it was a lesson that I learned. 0:56:05.0 Bubbles, in any financial sector, are not new. So prepare for them. 0:56:07.0.
And understand that no matter how good things look in any industry, you know – we believe in property management.
We tend to think, “Yeah, we’re fairly recession resistant.”
Well, sometimes, our recession is the opposite of everyone else’s. It’s when everyone’s selling their properties when we have challenges.
Or maybe, you know, there’s other things that can happen, but there’s no such thing as an industry that can’t have issues.
0:56:31.0 So, you know, bubbles aren’t new, we’re humans, it’s human nature to act in somewhat of a herd mentality.
So, always prepare by, again, running a lean machine in good times. Don’t add and start layering expenses that aren’t needed. Be very thoughtful about how much you’re spending to get new clients. 0:56:45.9 All that kind of stuff. It all matters and it’s, you know, property management is either riches by pennies or death pennies. One of the two.
0:56:53.7 And in good times and in bad. Anyways, that’s kind of my – I’ve always taken that lesson and taken it as a very cautious – a tale of caution. The Dust Bowl.
Heather: 0:57:04.3 Keep in mind you’re speaking with a man who’s survived back to back pretty devastating recessions in said industry. So, he’s definitely practicing what he preaches.
Michael: 0:57:15.4 And people wonder why I cut my own hair.
Jordan: 0:57:21.8 But do you have to tell them that? Or can they figure it out on their own is the real question.
Michael: 0:57:23.1 I don’t know. Unfortunately they can tell.
Heather: 0:57:26.9 These days it’s more like they can tell he doesn’t cut his hair.
Jordan: 0:57:32.2 Oh boy, oh boy. I love it.
Heather: 0:57:35.0 I did take a second to look up that book, Jordan, it was, If by Mark Batterson. It’s Trading Your If Only Regrets for God’s What If Possibilities. It was pretty phenomenal.
Jordan: 0:57:41.6 Cool! Awesome. Well, we’ll have to check it out. So, for me, what I take away from the non-business books getting listed in the business section is basically that the mental models, the thinking, the perception, that is reality.
0:57:53.2 And you guys know this. Right? We talked about this in the notes before the show. You come up with some advice for a strategy and you hand it to ten different people and there are ten different results.
0:58:02.0 Because your belief, your ability to implement is largely a mindset issue. 0:58:06.0 So, where ever that wisdom or that advice or that perspective comes from that allows you to actually take the steps that you need to take in your business, more power to you.
0:58:15.8 I do want to talk about, kind of in closing here, the Rent Bridge Academy that you guys just pushed out. Obviously, engaging with you guys for a full consult would be a fantastic route to go and I want to get your – make sure that we have your contact info if folks want to get in touch.
0:58:32.5 But for folks that are not ready, let’s say folks that are earlier in the life cycle, just kind of getting started up, you guys just released a fantastic educational resource.
0:58:41.2 Walk me through what is included in that and why you guys decided to kind of give away all the secrets.
Michael: 0:58:49.0 Yeah, so Rent Bridge Academy has grown out of, you know, again, the ability to share, you know, what we’ve learned and – in property management.
0:59:00.1 And not only that, as we’ve learned new things and as we’ve covered new topics to basically have a resource for, you know, startups for existing clients, or even existing property managers of all different levels in their business.
0:59:17.8 So that they can improve on their business without necessarily, you know – for those that have maybe difficulty either engaging us. 0:59:22.8 And quite frankly, we get booked up.
And so, we want to make sure that we have the ability to not necessarily not be able to service our clients or for those that want to learn from our, you know, from our business.
0:59:37.9 So that is the – that is where Rent Bridge Academy was born out of. And what we’re launching, as of – our first horse is live May 1st.
We’re pre-selling right now. 0:59:51.6 We’re starting with a startup course, which is a ten lesson course. Basically everything you need to know to run and grow a property management business.
1:00:01.5 And in – what that resource at Rent Bridge Academy is, is going to be everything from – we start here, we’re going to start and grow a business, and as you advance through the growth of your business, there’s other – you know, we’ll be releasing other courses. And different topics. 1:00:17.8 Some will be on marketing, some will be on advanced work flows and that kind of thing.
Heather: 1:00:22.8 Those will be more in depth versions of what you’re already going to see in the initial property management course release.
1:00:29.1 And specifically, this course is very much what our clients receive throughout the course of the year. Throughout the span of their year in working with us.
1:00:40.1 It’s simply compacted into a digestible format that new clients and clients that are not currently work with us can choose to tackle on their own. At their own pace and in their own convenience.
1:00:53.7 And really allows us the opportunity to not have to say no to anybody. We’ve met some extraordinarily talented people along the way.
Be it realtors that are just wanting to get into the business, or property managers that are getting into the industry from another industry altogether that simply can’t afford to work with us on a one on one basis.
1:01:16.1 Or, we just don’t have the time for it at that particular moment due to our current client load. 1:01:19.3 So, what this allows us to do is to just never have to say no.
The beauty of it is you’ll be able to reference it time and time again if you have questions and need to come back. If you need to brush up on a certain topic, it’s always going to be there for you in an online self-guided format.
Michael: 1:01:35.8 And as we receive feedback of what is one of the pressing issues people want to learn about or have a course on, we can then focus on the next course being what there is a higher demand for.
1:01:47.8 So, yeah, we’re really excited about this launch. And you had asked how to find that, you can just go to RentBridgeAcademy.com. There’s also a link from our main site, RentBridgeGroup.com. So either way you can end up there. So.
Jordan: 1:02:06.5 Perfect. So it is full stack. It is from operators and it is a great way to kind of test the waters if you’re new in the business.
If you just want to basically have a baseline to not have to relearn a bunch of stuff that other folks have figured it out, from folks that have first hand experience, this could be a great route.
If you’re thinking about upping your game, whether that be on the operation’s side of things, sales and marketing and you would like some help, you can check these guys out at RentBridgeGroup.com. I’ve had a great time talking with you guys.
I’m excited to see where things head in the future. I think there’s a ton of potential in this industry and it’s folks like you guys that are kind of leading the way and providing that extra shot in the arm. So, I appreciate what you guys are doing, let’s stay in touch.
Heather: Thanks Jordan, we appreciate you having us.
Michael: Thank you.